I’ve spent considerable time synthesizing all of the information I’ve consumed since my last “Bull v. Bear” entry, and enough has changed for me to render a new, timely, cogent market opinion. The following signals-through-the-noise attempt to substantiate an objective, data-driven narrative that can guide me through the equity market over the coming days, weeks, months, and quarter…

I’ve spent considerable time synthesizing all of the information I’ve consumed since my last “Bull v. Bear” entry, and enough has changed for me to render a new, timely, cogent market opinion. The following signals-through-the-noise attempt to substantiate an objective, data-driven narrative that can guide me through the equity market over the coming days, weeks, months, and quarter…

Bears need little more ammunition but this comparison I’ve been making between the SPX 2007 top and COMPQ 2012. Today’s QQQ is still aligned with its analogue to SPY 2007. (The SPY precedent has actually progressed into 2008 now.) I wanted to provide an update, because this is where the rubber meets the road: SPY began its preliminary slide at this point in its progression (around January 3, 2008)¹, breaking through neckline support of its Head & Shoulders top.

For a couple of months now, I’ve been covering analogues I’m finding across multiple asset classes, which all suggest a deep correction is due in 1q13. That includes historical precedents governing precious metals (2009), tech (2007), volatility (2011), the US Dollar (1996), and politicians (2008 & 2011). As noted parenthetically, not all originated from the same time period, yet they’re all aligning today, in real time. Earlier today, I mentioned bullish short term stirs within the equity space–a development that should lead SPX to the threshold of correction according to the technicals. Indices had started warning of a top in weekly fractals months ago, then daily fractals followed a few weeks ago, and now intraday charts are currently working toward that end. This is occurring in coordination with volatility–an important confirmation that redoubles my conviction.

Not much else needs to be said here. The S&P 500 (SPX) caught an early right shoulder on December 11, 2007, and although it tried to retrace part of that dark candle in the following week, those levels still have not been recovered–now a full 5 years later. Read the rest of this entry »